Before accepting any lender’s offer, we recommend comparing lending options from various providers. That way, you can find a loan that will fit your needs without being a burden. If you accept a loan with unfavorable terms, you could end up with worse debt and a badly damaged credit history.
Several companies are out there claiming to provide the best emergency loans. Unfortunately, many of these lenders engage in unscrupulous activities that take advantage of a borrower’s situation and lack of knowledge.
Before you borrow money from any lender, verify that you are dealing with a respectable company. You can identify the best emergency loan company by looking out for the following features.
Some lenders have stringent eligibility requirements that only a handful of borrowers can meet. If you submit a loan request to such a lender, you could find yourself waiting weeks or months for a response, only to have your application rejected.
Avoid wasting time by checking a lender’s eligibility requirements before seeking a loan from them. With online emergency loan platforms like ClearViewLoans and LendYou, you can find several lenders that are willing to work with you by simply filling an online form. Using such platforms is easier and faster than researching several lenders one at a time.
If you need $10,000, there’s no point contacting a lender that won’t offer more than $1,000. What if you borrow $1,000 from several lenders to get $10,000? That’s a bad idea because each lender will charge fees and interest rates. The combined expenses will cost more than borrowing money from one lender.
Save time and money by verifying the maximum and minimum loan amount a lender provides. Doing this before submitting a loan request will let you know if a lender can help with the loan amount you need.
Lenders typically perform a credit check before making a loan offer. The credit check will reveal a borrower’s credit score, and most lenders do not accept loan requests from individuals with a bad credit history. If you have a bad credit history, you will need to look for a lender that does not perform credit checks. Alternatively, find a lender with loan options for people with bad to fair credit.
Note that hard credit checks can reduce your credit rating, which is a problem if you already have bad credit. Prevent such an outcome by applying to lenders that perform only a soft credit inquiry. To understand the difference between hard and soft checks, read this article from Forbes.
A soft credit pull will involve viewing your credit report from the three major credit bureaus (TransUnion, Equifax, and Experian). A lender should only perform a hard credit check after you have accepted their loan offer.
Payment terms are the conditions attached to a loan. A lender should state these terms clearly in their loan offer. Loan terms typically include the loan repayment period, monthly payment amount, and fees (such as the origination fee).
You should work with a lender that can offer you terms that fit your circumstances. For example, if you need a short-term loan, don’t take a one-year loan that requires paying months of interest.
A lender’s offer may also mention prepayment penalties. Lenders charge prepayment penalties to stop borrowers from paying off their emergency loans before the repayment period expires. If you settle your loan too early, the lender cannot make money by receiving monthly interest on the loan.
Why opt for a payday loan with high interest rates when you can get an unsecured personal loan? If you are not comfortable with the loan options that one lender provides, look for a lender that offers loans that match your requirements.